Biofuels

by Debra Fiakas CFA Algae in the River Wate photo via BigStock My post “Algae Takes Flight” featured Algae-Tec (ALGXY:  OTC/PK),  Lufthansa’s new biofuel partner.  Algae-Tec has agreed to operate an algae-based biofuel plant in Europe to supply Lufthansa with jet fuel.  Lufthansa is footing the capital costs of the plant, which is to be located in Europe near a carbon source.  Algae thrive on carbon so industrial plants and power plants using fossil fuels make the best neighbors.  Lufthansa has agreed to purchase a...

Jim Lane On October 8th, Renewable Energy Group (REGI), the leading US biodiesel producer, announced unexpectedly that it now expects to report Adjusted EBITDA ranging from a loss of $2 million to a loss of $7 million. The company’s prior guidance for Adjusted EBITDA was a gain of $10 million to $15 million. The company expects to report gallons of biodiesel sold in a range of 60 to 63 million, compared to prior guidance of 55 to 60 million. The good news REG CEO Daniel Oh said that “Despite these fluctuations in our markets, we remain optimistic about...

by Debra Fiakas CFA Algae powered plane photo via BigStock No one has been more disappointed than me in the failure of algae-based biofuel operations to achieve commercial production  -  at least so far.  The model is beguiling:  feedstock for biofuel production in the form of oils produced by simple and widely available algae that can thrive on carbon dioxide, an otherwise be a toxic emission.  However, scale seems to have eluded algae-base biofuel producers. GreenShift Corp. (GERS:  OTC/BB) recently shifted its focus...

Jim Lane Amyris redux, or fiscal caution in the ramp-up process? We look at the data, as the advanced isobutanol pioneer switches Luverne from isobutanol to ethanol amidst production shortfalls. In Colorado, Gevo (GEVO) announced that, while making significant progress towards economic production levels, the company does not now expect to achieve its desired year-end run rate – instead it has delayed hitting that target into 2013. “While we have made significant progress towards economic production levels,” said Gevo CEO Pat Gruber, “we have decided to optimize certain specific parts of our technology to further enhance bio-isobutanol...

Jim Lane Biodiesel pump photo via Bigstock What will bigger targets mean for producers, livestock, obligated refiners, and the diesel-using public? In Washington, the EPA issued its final rule for 2013 establishing 1.28 billion gallons as next year’s biomass-based diesel volume requirement under the Renewable Fuel Standard (RFS), up from 1.0 billion gallons in 2012. “This 1.28 billion gallon level is in-line with what the EPA had originally proposed for 2013 dating back to last year,” commented Raymond James energy analyst Pavel Molchanov. “However, the...

Jim Lane Closely-watched green gasoline producer collapses as Waste Management (WM) declines next financing round. What does it mean for companies like Fulcrum Bioenergy, Enerkem, Agilyx, Agnion, Renmatix, Genomatica, and InEnTec? The Digest looks at the inside story. In Texas, Terrabon filed for Chapter 7 bankruptcy protection; the company’s operations will cease and a trustee will be tasked with liquidating the company’s assets for the benefit of creditors. The complete Chapter 7 announcement is here. In a statement, Terrabon’s leadership said that company could not obtain additional corporate funding to finish developing and engineering its...

Jim Lane Codexis, Shell redefine relationship; Codexis gains global rights; will lay off 133 staff; adopts anti-takeover measures; what does it mean for Shell, Raizen, Iogen, Codexis and Dyadic? What does it say about strategic investors in advanced biofuels? In California, Codexis (CDXS) announced that Shell has granted Codexis a royalty-bearing, non-exclusive license to develop, manufacture, use and sell cellulase enzymes developed under the companies’ Amended and Restated Collaborative Research Agreement. The scope of the New Agreement is worldwide, except Brazil, for enzymes used in the biofuels field. Codexis already has exclusive rights to commercialize its cellulase enzymes...

Jim Lane Algae powered plane photo via BigStock We look back on a big summer for biofuels development: There have been many recent algae biofuel developments, the drought, and the policy fight over the Renewable Fuel Standard. But in many respects, its been a summer about aviation biofuels – starting with the demonstration of the US Navy’s Green Strike Group and continuing to announcements of projects right through the summer. The story has internationalized, the technologies are broadening, and more and more blue-chip players are making...

by Debra Fiakas CFA Recently, in compiling our lists of remarkable small-cap stock trades, I was surprised to find the shares of Ceres, Inc. (CERE:  Nasdaq) among stocks setting new 52-week lows.  Ceres has only been trading since its initial public offering in February 2012, when the company sold 5.0 million shares at $13.00 per share.  After a brief trade higher in the early spring, Ceres shares have been steadily losing ground, finally setting an all-time low of $6.02 last week. Named after the Greek Goddess of Agriculture, Ceres is a self-styled energy crop producer.  Ceres...

Jim Lane With the US drought, food vs fuel has returned as an issue. What alternatives are scientists, entrepreneurs developing to take us beyond the old debate? With the US drought, food vs fuel has returned as an issue. What alternatives are scientists, entrepreneurs developing to take us beyond the old debate? In the past week we published a report that the chairman of Nestle, Peter Brabeck-Lemathe, has called anew for a ban on making biofuels from feedstocks that can also be used in food production. The backdrop for Brabeck’s comments is the US drought, which...

Jim Lane Analysts are bullish as KiOR’s (KIOR) drop-in biofuels technology transitions to commercial phase – what factors are driving all the good vibes? There are a lot of Eeyores around the advanced biofuels space these days – well, around the United States and to a great extent the EU as a whole, really. Gloomy, pessimistic, chronically depressed. Investors have been, in a similar mood, hammering advanced biofuels and biobased material stocks – in some cases to within a few bucks of cash on hand. KiOR, by contrast, has been generally able to create and sustain its...

Jim Lane Codexis expects to lose all of Shell funding, win freedom to operate globally (excepting Brazil). Pyrrhic victory or the necessary price of freedom? In California, Codexis (CDXS) announced that it expects to obtain rights from Shell to market its CodeXyme cellulase enzymes to other cellulosic biofuels developers, (excluding Brazil) and that Shell will discontinue its $60 million enzyme R&D program, which will result in the loss of 116 full-time jobs, or a third of the company’s staff. Raizen, the Shell-Cosan JV, will remain Codexis’ largest shareholder. Yesterday, as the company reported Q2 earnings, Codexis CEO John...

Jim Lane As Solazyme, Gevo and Amyris report on results for Q2, update forward guidance – what does the data reveal about demand, supply of advanced biofuels and co-products? We digest down analyst reports, company comments into a 5-minute summary of “news you can use”. In California and Colorado, the newswires have been working overtime this week in advanced biofuels, as several industry titans reported their latest quarterlies and subjected themselves to public scrutiny, which sometimes resembles the Puritan practice of mounting minor offenders in the public stocks and pelting them with rotten eggs and tomatoes. But it...

by Debra Fiakas CFA The stark reality of basing their business model on a food commodity has been brought into sharp focus for ethanol producers.  The drought settling across the U.S. corn crop is helping drive up corn prices for hog producers, chicken farms and ethanol plants alike.  Investors who simply must have a position in ethanol might think the sugarcane-based ethanol producers could offer a safe haven against the supply and margin squeeze that is certain to hobble GreenPlains Renewable Energy (GPRE:  Nasdaq), Pacific Ethanol (PEIX:  Nasdaq) and Poet (private), among others relying on corn feedstock....

Jim Lane Arch-critic of the cost of military biofuels Oklahoma Senator James Inhofe comes under scrutiny over earmarks for natural gas-based military fuels that cost 29 times more than conventional fuels. In Washington, the battle over advanced military biofuels took a turn for the bizarre this week, amidst revelations that a leading Senate sponsor of legislation to restrict Navy purchases of advanced biofuels, James Inhofe of Oklahoma, had previously secured earmarks for Syntroleum Corporation (SYNM) to produce natural gas-to-liquid alternative fuels which were priced 29 times higher than conventional fuels. Overall, Syntroleum reported receiving nearly $6...

by Debra Fiakas CFA Source:  Chicago Board of Exchange Two months ago GreenShift Corporation (GERS:  OTC) ambitiously promised to introduce by the end of 2012 an improved corn oil extraction system.   The company has developed technology to extract oil more from corn used as feedstock by ethanol producers.  GreenShift claims its first system is recovering an incremental 0.8 pounds of oil per bushel of corn in current installations.  The new system  -  called COES  II  -  is expected to increase the oil yields to 1.3 pounds  - ...